Bikaji Foods soars 8% to climb new peak; should you buy?

So far this year, Bikaji Foodd stock has rallied 37 percent. In comparison, benchmark Nifty 50 rose 14 percent during this period

Shares of Bikaji Foods gained over 8 percent on August 2 to scale a fresh peak of Rs 777 apiece on the National Stock Exchange (NSE). The stock has gained investors' interest as the snacks manufacturer recently reported strong earnings for Apr-June quarter.

The company reported a 40.2 percent increase in its consolidated net profit to Rs 58.06 crore in the fiscal first quarter ended in June 2024. Its revenue from operation rose 15.24 percent YoY to Rs 555.12 crore in the quarter under review.

According to Nuvama Institutional Equities, the festive and wedding season from Q2FY25 shall propel growth across markets, especially in sweets. Q3FY25 onwards, value growth shall outstrip volume growth, the brokerage said.

Bikaji management anticipates volume growth to be in the range of 13–15 percent in the medium term.

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"We shall monitor FSSAI developments related to packaging regulations and its impact on consumer sentiment," said Nuvama as it maintained a 'buy' rating on Bikaji with an unchanged target price of Rs 885.

Bikaji Foods' reported volume growth of 16.2 percent YoY, led by double-digit growth across categories. Its EBITDA for the quarter improved by 240 bps on account of operational efficiency and cost management, Bikaji noted.

According to JM Financial, Bikaji’s execution in the high-growth packaged snacks industry remains ahead of its listed peers, hence it believes premium valuations will sustain. The brokerage retained a 'buy' call on the snack maker's stock with a target price of Rs 780.

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At 2:37 pm, Bikaji Foods shares were trading nearly 5 percent higher at Rs 749.70 on NSE. So far this year, the stock has rallied 37 percent. In comparison, benchmark Nifty 50 rose 14 percent during this period. In the last one year, the stock has delivered returns of around 58 percent.

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